A tax plan introduced by House Republicans on Thursday could have a bigger impact on affluent San Diego County homebuyers than in the rest of the nation.
Why it matters: The plan would lower the annual mortgage interest deductions to newly issued loans totaling no more than $500,000, down from $1 million right now. Homes cost more in Southern California than much of the nation.
Impact locally: In September, the San Diego County median home price was $535,000. Typical buyers put 10 to 20 percent down, so most San Diegans would not have a loan affected by the new plan. However, luxury buyers with higher loans will see less of a tax benefit.
More details: There have been 17,862 homes out of 32,900 sold over $500,000 this year, said real estate tracker Reports on Housing.
Some examples: Matthew Shaver, a San Diego senior mortgage consultant at Finance of America, said he was processing 10 loans at the moment and all were under $470,000. He noted that the tax plan still would allow people with bigger loans to write off deductions up to $500,000.
“You still are going to get the bulk of the reduction,” he said.
For example, take a San Diego couple who decides to buy a home for $750,000. They would probably take out a fixed-rate loan and put 20 percent down. With a $600,000 loan at current interest rates, they would lose out on a $4,250 annual mortgage rate deduction under the proposed tax plan.
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